estate agent asking for mortgage in principal

Incisor

KellsBells wrote: »

Hello,

I work in repossessions, specifically I am an asset manager.

The Estate Agent is actually unable to put the offer forward to the bank/building society until they are satisfied that you are financially qualified. This means making sure that you have an agreement in principle/mortgage in principle.

If you don't have one, sit down with the financial advisor in their office - you won't be under any obligation to use them.

Please be reassured that this sounds perfectly normal, and in accordance with standard procedure. And FYI, the estate agent is not legally bound to report unqualified offers - only qualified ones.xx

In context, the advice only applies where the vendor has stipulated to the agent. Otherwise, AIUI, the agent IS legally bound

Jorgan_2

KellsBells wrote: »

Hello,

I work in repossessions, specifically I am an asset manager.

The Estate Agent is actually unable to put the offer forward to the bank/building society until they are satisfied that you are financially qualified. This means making sure that you have an agreement in principle/mortgage in principle.

If you don't have one, sit down with the financial advisor in their office - you won't be under any obligation to use them.

Please be reassured that this sounds perfectly normal, and in accordance with standard procedure. And FYI, the estate agent is not legally bound to report unqualified offers - only qualified ones.xx

The first question I always get asked when putting an offer forward on a repo is "Do they require a mortgage & have you seen proof they can get one?" The agent concerned is doing as there client asks, nothing more, nothing less. It would be a waste of time for the agent to try & put the offer forward without this information as the offer would not be considered.

Optimisticpair

If I was an EA I would like to be able to accept offers from people who are able to buy so I can see their point. From your shoes I see your point too but I wouldn't like it much if my EA sold STC to someone who can't prove they can afford my house.

We have sold our old house we exchange this week and complete at the end of the month. For our new house we have a mortgage waiting to be taken up, I'm getting a Damp firm in to quote next week and our vendor's EA is still advertising it for sale on rightmove

Watski

My partner is in the market for a house. She's in a perfect situation - first time buyer, 25% deposit, perfect credit rating, borrowing only 3x salary, ready to move, mortgage in principle, etc.

She saw a house advertised through Bairstow Eves in Braintree, viewed it, liked it and got in touch with the office to communicate an offer. The vendors are desperate to sell as they've got another place lined up. The estate agent said that they couldnt put the offer forward until my partner had seen their mortgage broker, even though she already has a mortgage in principle through her own bank. He said that the MIP from her bank didnt matter as he needed to ensure the funds were available via their own mortgage broker.

I knew this wasnt right and was just a case of the estate agents trying to tout for business in the hope of getting some people to switch their mortgage provider, I was also concerened about the extra superfluous credit check showing on the credit rating - so I spoke to my sister-in-law who coincidentally happens to work for an estate agents in the same family as Bairstow Eves who confirmed my thoughts and said that the only advantage of going through their broker would be that it was all in house and would be smoother communication between offices.

I rang up and challenged them on this, they quickly backtracked and said that they communicated all offers - so I asked for written proof that they had put the offer forward. But when I asked who they would recommend to the seller given a hypothetical situation of there being 2 offers on the table, one through their brokers and one through an unrelated bank - the estate agent said that they would always recommend any buyer going through their broker because they could be sure that the funds were in place. I asked about the extra unrequired credit check and he said that he would only be an issue if there were 5 or more going through and not 2 or 3. He also suggested that if an offer was accepted on a property from a buyer that didnt have a mortgage through their broker, that they would keep the property on the market until exchange of contracts - something that they wouldnt do if it was through their broker, again for the same reason.

chickmug

Watski wrote: »

My partner is in the market for a house. She's in a perfect situation - first time buyer, 25% deposit, perfect credit rating, borrowing only 3x salary, ready to move, mortgage in principle, etc.

She saw a house advertised through Bairstow Eves in Braintree, viewed it, liked it and got in touch with the office to communicate an offer. The vendors are desperate to sell as they've got another place lined up. The estate agent said that they couldnt put the offer forward until my partner had seen their mortgage broker, even though she already has a mortgage in principle through her own bank. He said that the MIP from her bank didnt matter as he needed to ensure the funds were available via their own mortgage broker.

I knew this wasnt right and was just a case of the estate agents trying to tout for business in the hope of getting some people to switch their mortgage provider, I was also concerened about the extra superfluous credit check showing on the credit rating - so I spoke to my sister-in-law who coincidentally happens to work for an estate agents in the same family as Bairstow Eves who confirmed my thoughts and said that the only advantage of going through their broker would be that it was all in house and would be smoother communication between offices.

I rang up and challenged them on this, they quickly backtracked and said that they communicated all offers - so I asked for written proof that they had put the offer forward. But when I asked who they would recommend to the seller given a hypothetical situation of there being 2 offers on the table, one through their brokers and one through an unrelated bank - the estate agent said that they would always recommend any buyer going through their broker because they could be sure that the funds were in place. I asked about the extra unrequired credit check and he said that he would only be an issue if there were 5 or more going through and not 2 or 3. He also suggested that if an offer was accepted on a property from a buyer that didnt have a mortgage through their broker, that they would keep the property on the market until exchange of contracts - something that they wouldnt do if it was through their broker, again for the same reason.

This is from the NAEA Code of Practise. See part in red as it sounds like an agenst using blackmail and it stinks. Report them.

5. Offers

a) By law you must tell clients as soon as is reasonably possible about all offers that you receive
at any time until contracts have been exchanged (in Scotland, missives have been concluded)
unless the offer is an amount or type which the client has specifically instructed you, in
writing, not to pass on. You must confirm such offers in writing at the earliest opportunity and
keep a written or computerised record of all offers you receive.
b) You must not discriminate, or threaten to discriminate against a prospective purchaser of your
client’s property because that person refuses to agree that you will (directly or indirectly)
provide services to them. Discrimination includes the following:
• Failing to tell the client of an offer to buy the property.
• Telling the client of an offer less quickly than other offers you have received.
• Misrepresenting the nature of the offer or that of rival offers.
• Giving details of properties for sale first to those who have indicated they are prepared to
let you provide services to them.
• Making it a condition that the person wanting to buy the property must use any other

service provided by you or anyone else.

charliee_3

lil'H wrote: »

My mortgage broker told me NOT to get an agreement in principal. He said they are worthless as the mortgage market is changing so frequently. Getting an agreement in principle leaves a mark on your credit record, which could affect you when you come to actually apply for a mortgage. If you go with a good broker they can tell you what you can get and with who, then mine has told me to tell agents to call him if they aren't happy. Everytime I've told agents what the broker said and who my broker company is (they are one of the biggest) amazingly the EA has shut up and they are still putting me forward to vendors as a buyer with finances in place.

if you are buying a repo you have to be ready to proceed straight away so i can understand why they would want to see an OIP before they put the offer forward. Our mortgage broker said you can get 2 OIP pretty much before it affects your credit rating, but if you decide to go wth someone else they can call to check that it will not affect it.

charliee_3

Watski wrote: »

My partner is in the market for a house. She's in a perfect situation - first time buyer, 25% deposit, perfect credit rating, borrowing only 3x salary, ready to move, mortgage in principle, etc.

She saw a house advertised through Bairstow Eves in Braintree, viewed it, liked it and got in touch with the office to communicate an offer. The vendors are desperate to sell as they've got another place lined up. The estate agent said that they couldnt put the offer forward until my partner had seen their mortgage broker, even though she already has a mortgage in principle through her own bank. He said that the MIP from her bank didnt matter as he needed to ensure the funds were available via their own mortgage broker.

I knew this wasnt right and was just a case of the estate agents trying to tout for business in the hope of getting some people to switch their mortgage provider, I was also concerened about the extra superfluous credit check showing on the credit rating - so I spoke to my sister-in-law who coincidentally happens to work for an estate agents in the same family as Bairstow Eves who confirmed my thoughts and said that the only advantage of going through their broker would be that it was all in house and would be smoother communication between offices.

I rang up and challenged them on this, they quickly backtracked and said that they communicated all offers - so I asked for written proof that they had put the offer forward. But when I asked who they would recommend to the seller given a hypothetical situation of there being 2 offers on the table, one through their brokers and one through an unrelated bank - the estate agent said that they would always recommend any buyer going through their broker because they could be sure that the funds were in place. I asked about the extra unrequired credit check and he said that he would only be an issue if there were 5 or more going through and not 2 or 3. He also suggested that if an offer was accepted on a property from a buyer that didnt have a mortgage through their broker, that they would keep the property on the market until exchange of contracts - something that they wouldnt do if it was through their broker, again for the same reason.

sounds similar to what happened to my friend. that may have actually been bairstow theives in braintree too as was in silver end... they were going for a house and had their MIP with the bank but someone else put in the same offer and had their mortgage through the EA and they basically, despite numerous conversations and faxes from the bank to say all ok.. said they were going to recommend to the vendor that they went for the other people as they 'knew for sure' the funds would be availble as they were going through their broker.. hmmm

Watski

Thanks for that..I must admit that annoyance got the better of me and I rang the estate agents to clarify a few things.

Pretty much what they are doing is frightening sellers, apparently 1 in 5 prospective house sales falls through because people put offers in without having mortgages and then the seller gets let down. What is happening here is that the agents are preying on that fear and offering the sellers a solution - get us to approve any prospective buyers (whilst also giving us the chance to sell them a mortgage), and you wont get let down when they put an offer in and wont be hit financially. What they dont do however, is tell the prospective buyers this, until after you've seen the house and want to put an offer in. Then they tell you that the seller has informed the agent that this is the way they want to do it.

Whilst immoral, you can see their business plan, and I guess they have to make money. I can understand that. The problem lies in the fact that they say that not only will they recommend offers from people who have seen their broker above those that have gone elsewhere (on the premise that they are only confident that the funds are in place with their own broker), but that they will also keep the house on the market if your offer is accepted. They say that they will remove the house from the market as soon as an offer is accepted if you use their broker.

Whilst I understand that they have to use all available means to try and make money, my partner is becoming disadvantaged in the market place because she wont sit in their office for an hour and listen to them trying to sell a mortgage to them.

Our strategy is simple - 2 can play at that game. My partner loved the house this morning, she isn't fussed now after the hassle. She's retracted the offer made earlier today and offered a slightly higher offer on condition that she is allowed to use her own bank, and also a lower offer if she has to sit down with their broker.

pinkshoes

Watski wrote: »

Our strategy is simple - 2 can play at that game. My partner loved the house this morning, she isn't fussed now after the hassle. She's retracted the offer made earlier today and offered a slightly higher offer on condition that she is allowed to use her own bank, and also a lower offer if she has to sit down with their broker.

Why is this playing the game?? The higher the sale price, the more commission the EA gets! So if she does the above, the EA wins!

She should stick to her initial offer, put it in writing, and post it through the door of the house she wants to buy, with an additional "ps" at the bottom asking if the seller is aware that their EA is refusing to pass offers on unless the buyer sees their mortgage advisor!